Correlation Between National Beverage and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both National Beverage and Austevoll Seafood at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining National Beverage and Austevoll Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Austevoll Seafood ASA, you can compare the effects of market volatilities on National Beverage and Austevoll Seafood and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in National Beverage with a short position of Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Austevoll Seafood.
Diversification Opportunities for National Beverage and Austevoll Seafood
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Austevoll is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA and National Beverage is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on National Beverage Corp are associated (or correlated) with Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of National Beverage i.e., National Beverage and Austevoll Seafood go up and down completely randomly.
Pair Corralation between National Beverage and Austevoll Seafood
Assuming the 90 days trading horizon National Beverage Corp is expected to generate 1.25 times more return on investment than Austevoll Seafood. However, National Beverage is 1.25 times more volatile than Austevoll Seafood ASA. It trades about 0.18 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.22 per unit of risk. If you would invest 4,662 in National Beverage Corp on September 4, 2024 and sell it today you would earn a total of 292.00 from holding National Beverage Corp or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Austevoll Seafood ASA
Performance |
| Timeline |
| National Beverage Corp |
| Austevoll Seafood ASA |
National Beverage and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Austevoll Seafood
The main advantage of trading using opposite National Beverage and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage position performs unexpectedly, Austevoll Seafood can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| National Beverage vs. Associated British Foods | National Beverage vs. Charter Communications Cl | National Beverage vs. Fevertree Drinks Plc | National Beverage vs. Zegona Communications Plc |
| Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Samsung Electronics Co | Austevoll Seafood vs. Hyundai Motor | Austevoll Seafood vs. Toyota Motor Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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